In the the biggest revamp in wireless pricing in years, Verizon Wireless (VZW) is dropping nearly all of its cell phone plans in favor of pricing schemes that allow consumers to share data usage among up to ten 3G/4G wireless devices. The nation’s largest cellphone company will introduce “Share Everything” plans on June 28th. VZW is calling it a “groundbreaking” pricing scheme that will, “forever change the way customers purchase wireless services.”
“Share Everything” will include unlimited phone calls and texting, and will start at $90 per month for one smartphone and 1 gigabyte of data. The new plans will let individuals add non-phone devices like tablets and laptops to their plans, as well as the phones of family members. It will allow users to cover up to 10 devices under one contract.
If used only with a single smartphone, “Share Everything” prices are lower than for current plans with unlimited calling and texting, but higher than plans with limited calling and texting. Current VZW customers will be able to switch to the new plans or keep their old ones, but without subsidies for new smart phones.
Verizon Wireless currently offers a 2-gigabyte data plan for $30 monthly, and 5 gigabytes for $50 monthly. Some of Verizon’s customers still remain on unlimited data because they never changed their plans. Verizon has said that such customers cannot keep those plans if they want to upgrade their device with a subsidized one. Those who have unlimited-data plans for their smartphones won’t be able to move those to new phones, unless they pay the full, unsubsidized price for those phones. For example, an iPhone 4S that costs $200 with a two-year contract costs $650 unsubsidized, with no contract.
Bigger savings will come for those who add more devices like media tablets or game players to their plans. In such cases, the new pricing system will be cheaper compared to separate data plans for each device. That gives VZW a chance to capitalize on the growing popularity of tablets. Under “Share Everything,” adding a tablet to a plan will cost $10 per month. Adding a USB data stick for a laptop will cost $20 per month.
The “Share Everything” composite device data allowances start at $50 per month for 1 gigabyte. That’s enough for prudent two-smartphone users who use Wi-Fi a lot, but Verizon recommends getting 2 gigabytes for $60. After that, each additional 2 gigabytes cost an extra $10 per month.
At first glance, this appears to be a new spin on “family plans.” VZW already offers family plans that might be cheaper than its Share Everything plans, but they have lots of options and can be more confusing than the simpler pooled data plans, according to Venture Beat.
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AJW Comment and Analysis:
VZW’s new pricing plan takes into account the declining use of voice and increased consumption of mobile data, especially video. The Share Everything plan encourages increased data usage by making it easier to add devices such as tablets. But heavy mobile data users will have to pay a lot more for the data they consume. For example, two smart phones [combined with a basic phone] with 4 GB of data will add up to $180 a month. This may cause a huge shock when VZW subscribers get their monthly bills.
The new plan also permits VZW to collect revenue for mobile data that was once offered on an unlimited basis. Those “all you can eat” plans won’t be very popular without the smart phone subsidies that VZW is ending. Will consumers be willing to pay $650 for a 16-gigabyte iPhone 4S from Apple to keep their unlimited data plan? We don’t think so.
We think AT&T is likely to follow with a similar plan. Sprint has said it will continue to offer unlimited data, while executives at T-Mobile have questioned the usefulness of multiple mobile users in a family sharing from one data pool. The teenager downloading or streaming a video is likely to consume most of the allocated monthly data, which won’t sit well with the parents.